Tesla May Soon Compete With Amazon On Data: Could The Musk, Bezos Rivalry Escalate?

Tesla Inc TSLA may soon have another business segment in addition to the electric vehicle space, which it currently dominates.

What Happened: The company, also known for its operations in solar, energy storage and charging infrastructure, may expand operations into data centers — a move that could put Tesla in direct competition with Amazon.com Inc AMZN, Microsoft Corporation MSFT and Alphabet Inc GOOGGOOGL.

A job posting from Tesla, spotted by Electrek, calls for a “Sr. Engineering Program Manager, Data Center.”

“This role will lead the end-to-end design and engineering of Tesla’s 1st of its kind Data Centers and will be a key member of the factory engineering team,” the job description reads.

The job posting lists a location of Austin, Texas where Tesla is headquartered.

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Why It’s Important: According to Electrek, the data center business is worth over $250 billion, which could make it attractive to newcomers like Tesla.

Tesla has expanded several customer offerings that could require a large amount of data storage, including its “premium connectivity” and virtual power plants.

The Information reported in June that Tesla took over the lease of at least one data center previously leased by Twitter, the social media company Tesla CEO Elon Musk purchased.

Based on the job description and reports that Tesla needs more places to house its own data, Tesla’s growth in the data centers could be strictly an internal move.

This would mean Tesla is only looking to have its own data centers for its growing pile of data from users, and not to serve as a competitor of other technology companies that sell data storage solutions.

Amazon’s AWS business has been one of its biggest drivers of growth in recent years. The company has been a market leader in cloud storage and enterprise storage solutions.

In the most recently reported second quarter, Amazon saw revenue for AWS hit $22.1 billion, up 12% year-over-year.

“Our AWS growth stabilized as customers started shifting from cost optimization to new workload deployment, and AWS has continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases,” Amazon CEO Andy Jassy said.

If Tesla were to offer data storage solutions for other companies and non-Tesla customers, it would add yet another layer to Musk's rivalry with Amazon founder Jeff Bezos.

Musk and Bezos already have a mutual interest in space exploration.

Short seller Jim Chanos has soured on data centers in recent years. Chanos, who is also an opponent of Tesla, launched a big bet against data centers in 2022 and called it his “big short."

“The story is that although the cloud is growing, the cloud is their enemy, not their business. Value is accruing to the cloud companies, not the brick-and-mortar legacy data centers,” Chanos said last year.

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